Things look much different today in Alberta than when Jim Prentice announced he would seek the leadership of the Alberta Progressive Conservative Party.

The most important change is that oil prices have dropped almost $40 US a barrel since May, settling at $63.82 US on Tuesday. And Prentice isn’t mincing words about the implications of the significant drop.

“This is a serious situation,” he said during an interview Monday afternoon. “We are talking about a very significant reduction (in oil prices) with very significant implications for our province.

“Our province depends on oil royalties for about 21 per cent of our incoming revenue and so this is a serious situation.”

In many ways, Alberta is facing the perfect storm — a pressing need for infrastructure and declining oil royalties.

“We still have to construct public facilities, but we have to do it in an environment where there is less revenue. That is what we are trying to balance,” said Prentice.

Of course, were Prentice willing to do something to shift Alberta away from its reliance on the energy revenue sine wave — such as moving from a flat tax to one that’s progressive or instituting a sales tax — we probably wouldn’t be having this conversation.

But, as Prentice reiterated Tuesday, there is nothing remotely resembling a sales tax on the horizon for Albertans. We’re therefore left with hope as a strategy for a recovery in oil prices to again fill provincial coffers.

The problem is that the price of oil isn’t something Alberta can control.

From that perspective, which is as practical as it can get under the circumstances, the focus should be on what can be controlled to weather what’s shaping up to be a tough 2015.

While this obviously means working with diminished revenues — Prentice said the province is using oil price forecasts of $65 to $75 a barrel for fiscal 2015/16 budgeting purposes — other factors include the need to be more deliberate in diversifying the Alberta economy by leveraging existing strengths and doing what’s needed to broaden market access for the barrels to be produced in Alberta.

To that end, Prentice travelled to Ontario and Quebec last week — visits he described as “a relationship meeting” as it was the first time he had met both Premier Kathleen Wynne of Ontario and Premier Phillipe Couillard of Quebec.

The importance of investing time in building relationships — for now and the future — is not lost on Prentice, particularly given the shifting economic sands.

“It’s important Alberta have a constructive relationship with the premier of the most populous province in the country and secondly, with the province of Quebec, where we have had a historic, important relationship,” said Prentice.

One item on Prentice’s agenda with both premiers was TransCanada’s Energy East project.

The importance of access to tidewater — both east and west — has increased exponentially since the option of shipping oil by rail, how many barrels from Alberta reach refineries in the United States and both coasts, is no longer economic.

“Any pipeline or transportation project that accesses global markets will yield better prices and so they need to continue to be a priority,” said Prentice.

It’s one thing to send oil by rail — at a premium of $15 to $20 a barrel — when it’s $100 a barrel, but it’s another entirely when prices are where they are today, and especially if they drift lower.

As much as Prentice had a message to deliver last week, so, too, did Wynne and Couillard, who each emphasized they were not interested in reviewing upstream emissions, but wanted the focus to be on the GHG performance of the pipeline, the first response provisions and environmental standards, to name a few.

To his credit — and Alberta’s — Prentice accepted their respective positions, noting Wynne’s comments were “constructive and properly reflect the way the national regulatory review of a national project should happen.”

He also did not take the position that Quebec lacks constitutional grounds to challenge the Energy East pipeline.

On the contrary, Prentice said Quebec “has concurrent jurisdiction relative to the project” since it must issue permits to TransCanada for certain aspects, such as the port at Cacouna.

“Even in the case of projects that are truly national, there is a case for provincial permits to be issued … that’s why in many cases we opt for a joint review process as a way to manage the concurrent environmental jurisdiction,” he said.

At the same time, Prentice did not fail to remind Couillard and Wynne of the economic benefits that accrue to the rest of the country from Alberta’s energy sector, citing as one example that turbines to be part of the Energy East project will be manufactured by General Electric in its Peterborough, Ont., facility.

On the issue of port facilities in Quebec, Prentice said he made the point with Couillard that the ports — while facilitating oil exports — would also be used by industries outside the energy sector.

That’s true, assuming the project goes forward. It’s tough to think TransCanada is up for another protracted political fight along the lines of what has taken place in the U.S. with respect to its Keystone XL project.

That’s why it was important Prentice went east.

It could be said this was all about taking some very important steps to start what needs to become a national energy dialogue. As he said more than once Monday, the benefits of the industry stretch across the country.

This point was underscored by Tim McMillan, the new president of the Canadian Association of Petroleum Producers, when he spoke Tuesday to an audience of business leaders at a Calgary Chamber of Commerce luncheon.

“For the energy projects going on in Alberta or Saskatchewan, the supplier networks are national. So even those projects that are geographically located in this province have huge effects nationwide,” said McMillan. “From the oilsands activity alone, the government of Ontario gets $1.3 billion annually in taxes and royalties.”

Of course, this picture will change somewhat given the current state of affairs that has energy companies cutting budgets and reconfiguring their spending plans for 2015.

And while Prentice clearly has to be mindful, in the short term, as Alberta prepares its budgets, he made the point that despite the downdraft in oil prices, it’s important not to panic and that what’s happening in energy markets ” … does not reflect on the long-term sustainability or viability of Alberta or our energy industry. We will be fine in the long term.”

Sooner or later, every leader — political or corporate — is tested. Prentice likely didn’t expect this kind of exam so soon into his tenure.

His grade will be assessed when the current oil storm abates, or the next provincial election arrives — whichever comes first.

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